WEEKLY SUMMARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300020008-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 26
• Document Creation Date: December 27, 2016
• Document Release Date: March 1, 2011
• Sequence Number: 8
• Publication Date: February 14, 1975
• Content Type: SUMMARY

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_Secret?
Weekly Summary
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Secrct
No. 0307/75
February 14, 1975
Copy NS - 1378
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CONTENTS (February 14, 1975)
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EUROPE
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MIDDLE EAST
AFRICA
EAST ASIA
PACIFIC
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WESTERN
HEMISPHERE
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4 Ethiopia: Fighting Less Intense
5 Peru: The Aftermath
6 Cyprus: Turkish Cypriot Autonomy
8 Italy: Fanfani Survives
9 CSCE: At a Crucial Point
10 USSR-Somalia: Missile Facility
10 EC-CEMA: Dialogue of the Deaf
11 USSR: Soyuz 17 Cosmonauts Return
12 Berlin: Endless Negotiation
13 Romania-Yugoslavia: Drawing Closer
14 Egypt: Port Problems Mount
15 Pakistan: Bhutto Cracks Down
16 Malagasy epublic: More Problems
17 Cambodia: The Stranglehold Tighten
18 South Korea
20 Vietnam: A Quiet Tet
21 Ecuador: Perils of Prosperity
22 Brazil: Pace of Liberalization
23 Panama; Argentina
24 Venezuela: Oil Diplomacy
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Ethiopia: Fighting Less Intense
Fighting in Eritrea Province between govern-
ment forces and insurgents, now entering its third
week, has been light in recent days, but the
tempo could quickly increase. Although govern-
ment forces retain control of urban areas, they
have been unable to prevent raids on the provin-
cial capital of Asmara or to dislodge the rebels
from positions along the roads leading into the
city. Only a few vehicles have managed to enter
Asmara, and government forces continue to rely
mainly on airlifts for resupply.
Early on February 8, the insurgents attacked
two tracts of Kagnew Station, the US communi-
cations complex in Asmara. Rockets were fired at
fuel storage tanks; small arms fire, apparently
aimed at oil barrels, struck trailers occupied by
US personnel, but caused no casualties. Two days
later, the rebels again fired heavy automatic
weapons and rockets into Asmara. For the most
part, they shot at Ethiopian military facilities, but
some rounds were aimed at the US portion of the
Kaynew facility, which is occupied by both a US
naval communications unit and the Ethiopian
army. Kagnew's fuel and generators have ap-
parently become prime targets for the rebels.
Port Suclan;,,,
S DAN
Khartoum
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Red
SAUDI ARABIA
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ETHIOPIA
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KENYA
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TANZANIA
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Indian
Ocean
. MM.
SUM, 2-75
Insurgent fire has already knocked out the main
power station north of Asmara.
Government forces are facing supply short-
ages, but they apparently do not have major logis-
tic problems at this time. Some units in areas
north and south of Asmara reportedly continue
to experience shortages of ammunition, fuel, and
food. The air force resumed attacks on rebel
positions early in the week after a standdown of
about three days, probably because of a lack of
fuel.
The performance of the army improved this
week with the arrival in Eritrea of the army
commander to take personal charge of operations.
Troops are showing more fire discipline; their
indiscriminate shooting last week rapidly depleted
ammunition supplies. Government forces still
have serious morale and leadership problems, and
there is serious disaffection in the air force. Many
pilots and technicians are Eritreans or are married
to Eritreans. A large number have defected,
refused to engage in combat operations, or
instituted maintenance slowdowns.
The army has suffered about 1,000 cas-
ualties, including about 75 killed. Rebel losses are
believed to be much lower. Civilian casualties may
exceed 5,000.
President Numayri of neighboring Sudan ap-
pealed to the rebels and to Ethiopia's ruling mili-
tary council on February 8 for an immediate
cease-fire and the beginning of negotiations.
Neither side seems willing to accept his proposal.
Spokesmen for one of the two main rebel factions
rejected Numayri's appeal because it does not
make the principle of Eritrean independence?the
major rebel demand?a precondition for a cease-
fire.
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Peru: The Aftermath
Important issues remain unresolved in the
wake of the violence that shook Lima on Febru-
ary 5 and 6. The civil guard may go on strike
again if, as seems likely, its demands are not met.
Inside ihe regime, debate undoubtedly continues
over the handling of the trouble and over how to
avoid further outbreaks of violence. President
Velasco's support has been shaken, but his posi-
tion does not yet appear to have been critically
weakened.
One matter that is stirring debate within the
regime is the proposed formation of a pro-govern-
ment political movement to drum up support for
the military's programs and to counter civilian
opposition. Any rush to proclaim a pro-govern-
ment party, however, would exacerbate long-
standing antagonisms between so-called moderate
and radical officers at a time when unity is crucial
to Velasco's ability to govern effectively.
The more moderate
that a government party
control and would be a
officers probably fear
would be difficult to
source of pressure for
even more radical domestic policies. These of-
fice's already are upset over Velasco's increasingly
repressive tactics. The moderates, and probably a
number of radical officers as well, may be con-
cerned that Velasco's continuation in power will
only widen the gulf between the military and the
majority of the population.
Civilian opponents of the government may
be counting on the new prime minister, General
Francisco Morales Bermudez, to assert himself
and either force Velasco from office or persuade
him to pursue a more moderate tack. In the short
term, however, it is highly unlikely that any mili-
tary leader would champion the cause of groups
that were involved in clearly anti-military vio-
lence. The issues underlying the disturbances are
fundamental and no quick solutions are in sight.
Even if no further violence occurs over the short
term, political activity both within the military
and among civilians is certain to intensify. In the
balance will be the future ccurse of Peru's six-
ear-old military-led revolution.
Russian-made T-55 tank patrols downtown Lima
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Clerides and Denktash
CYPRUS: TURKISH CYPRIOT AUTONOMY
Prospects for a negotiated settlement appear
dimmer than ever following the announcement on
February 13 by the Turkish Cypriots that they
were establishing an autonomous wing of a pro-
posed federal state.
Turkish Cypriot officials declared in Nicosia
yesterday that it was no longer possible for the
two communities to live together and that the
Turkish Cypriot community would reorganize its
administration and operate as an independent
entity pending a final settlement based on a geo-
graphically based, bi-regional federation. To this
end, a constituent assembly would be formed that
will act as the legislative body under the chair-
manship of Rauf Denktash.
Turkish Cypriots intend to follow up this
action with a position paper setting out terms for
a final settlement. Yesterday's declaration rejects
the Greek Cypriot insistence on a multi-regional
federation and leaves only the powers of the
central government and the size of the Turkish
Cypriot region as topics for further discussion.
Previous Turkish Cypriot statements suggest that
their forthcoming position paper will call for a
weak central government and a substantially
larger zone for themselves than warranted by
their ratio of the population-18 percent.
The Turkish Cypriot declaration of ;Au-
tonomy came a few days after Greek Cypriot
negotiator Clerides presented his proposals for a
settlement to the UN special envoy to the talks.
These proposals were to be transmitted to Turk-
ish Cypriot negotiator Denktash, who had asked
for a postponement of the session on February 10
in order to have more time to complete his pro-
posals. The Greek Cypriot draft called for:
? A multi-regional federation with a strong
central government;
? A large Turkish Cypriot zone between
Nicosia and Kyrenia on the north coast, along
with several smaller zones, comprising an area
that would approximate the Turkish Cypriot
proportion of the island's population;
? Strong guarantees for members of the
opposing community living in the Greek and
the various Turkish Cypriot zones;
? Freedom of movement for all Cypriots,
and the right to own property anywhere on
the island.
The draft also called for implementation of
the UN Security Council resolution that provides
for the withdrawal of foreign troops and the
return of refugees to their homes. The Greek
Cypriots cited, moreover, the need for "effective
and wide" international guarantees for the final
settlement, suggesting that they were still pressing
for abandonment of the previous arrangement?
which gave Turkey as well as Greece and the UK
the right to intervene?in favor of some type of
UN guarantee.
By presenting the Greek Cypriot proposals
at this time, President Makarios had hoped to
force the Turkish Cypriots to reveal their hand
and provide some clues as to whether a solution
could emerge from the talks. Makarios believed
that if the talks were allowed to drag on incon-
clusively, the Cyprus problem would fade from
the limelight and international pressure on the
Turkish side to make concessions would lessen.
Makarios had already stated his intention to inter-
nationalize the issue and to turn to the UN
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Security Council if the talks become deadlocked.
The Turkish Cypriot declaration of autonomy
will likely strengthen Makarios' inclination to in-
ternationalize the problem, but he will probably
not make any moves until the contents of the
Turkish Cypriot position paper are revealed.
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ITALY: FANFANI SURVIVES
The meeting last week of the Christian
Democrat Party's national council?the party's
highest deliberative body?was marked by a divi-
sive debate over the leadership and policies of
Arnintore Fanfani. Fanfani came out on top, but
he will clearly be on trial in the coming weeks as
the Christian Democrats prepare for crucial na-
tionwide local elections to be held in May or
June.
Christian Democrats have always come in
many colors, and it is not unusual for the party's
six highly organized and independently financed
factions to be at odds. Factional strife has in-
tensified during the last year, however, as evi-
denLe has mounted that the Christian Democrats
are in danger of losing the dominant position they
have held in Italian politics for 30 years. Many
Christian Democrats hold Fanfani responsible for
the party's losses to the left last year in the
divorce referendum, the Sardinian election, and
other balloting at the local level. They also blame
him for the public disenchantment with the Chris-
tian Democrats and the growing popularity of the
Socialists and Communists, as suggested by recent
polls.
The debate within the party focuses on
measures to stop the erosion of the Christian
Democrats' strength. The central question at the
national council meeting was how to avoid a
m-or loss to the left in the local elections this
spring. Discussion focused on the program put
forward by Fanfani as the basis for the party's
campaign. Its most controversial points were:
? Firm opposition to closer relations with
the Communists. Fanfani flatly ruled out an
accord with them at the national level and
condemned recent moves toward local col-
laboration with the Communists by Christian
Democrat organizations in Venice and three
other localities.
? Rejection of the Socialist Party's recent
demand for more influence in future center-
left coalitions. The Socialists argue that their
recent successes at the ballot box entitle them
to more ministries and to a larger say in the
formulation of legislative proposals.
? Tougher law-and-order measures. Fan-
fani seems determined to make this the cen-
terpiece of his campaign; he insisted last week
that law enforcement should take precedence
over all of Italy's other problems.
Four party factions?about 80 percent of the
membership?eventually lined up behind Fanfani.
The remaining 20 percent, concentrated in two
left-wing factions, continued to oppose him on all
points except his call for support for the Moro
government and for a party assembly this spring
to refine election strategy. The opposition of the
left-wing factions means that they will no longer
be repre-ented in the party secretariat. Thus, for
the first cime since Fanfani took over in mid-
1973, the party is divided into formal majority
and minority groupings.
The left contends that Fanfani is wrong in
giving the party a conservative cast at a time when
most evidence indicates that the electorate is in a
mood for change. They believe that events during
the last year demonstrate that the anti-Commu-
nist theme is no longer an effective vote-getter
and that it is time to improve relations with the
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Communists, short of actually bringing them into
the government. Most left-wingers, moreover,
reason that strengthened ties between the Social-
ists and Christian Democrats would be the best
way to avoid having to deal directly with the
Communists.
Although the majority behind Fanfani is
large numerically, there are signs that moderates
in this group share the misgivings of the party
left. Major figures such as Moro and Foreign Min-
ister Rumor supported Fanfani at the meeting,
but they dealt less harshly with the Socialists and
Communists. Moro, for example, is known to
favor preferential treatment for the Socialists. Al-
though Moro and others are not enthusiastic
about Fanfani's ideas, they have apparently con-
cluded that the party cannot afford an internal
fight on t:,e eve of major elections.
The leadership meeting was thus a qualified
success for Fanfani. The question of the party's
relations with the Socialists and Communists is by
no means closed, however, and the continuation
of Fanfani's mandate and policies will depend
above all on whether he can avoid another loss to
the left in the coming elections. I
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CSCE: AT A CRUCIAL POINT
Both East and West would like to see the
substantive work of the (...onference on Security
and Cooperation in Europe conclude this spring.
If the Soviets maintain their tough stand, how-
ever, this may not be possible despite the West
European willingness to compromise.
Since the beginning of this round on January
20, the Soviets have been digging in their heels on
? practically all conference topics. They assume
that their idea of concluding the conference at
the summit level this summer has been accepted
by most of the Western participants. They seem
to think, therefore, that they can buy Western
approval of watered-down proposals by making
only minimal concessions in the final stages of the
conference's substantive work. The Soviets have
continued to scoff at Western proposals on mili-
tary-related "confidence-building measures" and
have been unyielding on "human contacts" issues.
The major West European powers, weary of
the proceedings in Geneva, are clearly in a mood
to compromise. The French, in an effort to be as
forthcoming as possible during the Brezhnev-
Giscard summit in December, came close to agree-
ing to the Soviet demand that the security confer-
ence have a summit finale, and other West Euro-
pean countries are known to be leaning toward
such a conclusion. The British, hoping for the
success of Prime Minister Wilson's visit to Moscow
this week, have suggested a number of con-
cessions the Western side might make. Recently,
there have been signs that the British and French
are becoming less insistent on certain humani-
tarian issues, on which all the West Europeans
have heretofore been particularly stubborn. Only
the Netherlands now appears to be hewing to a
hard line on nearly all these issues.
Moscow may have overestimated the extent
to which the West Europeans are willing to make
concessions, however, as nearly all of them have
conference goals they will be reluctant to aban-
don. If the Soviets do not show signs soon of
being willing to bargain meaningfully, the
compromising mood of the West Europeans could
evaporate and the conference could be prolonged.
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Even if real bargaining gets under way soon,
the conferees will have to move briskly in order
to meet the tentative timetable being discussed in
Geneva, which envisages completion of sub-
stantive work in April or May and a formal con-
clusion in June or July. Once agreement is
reached on outstanding issues, there will still be
the laborious process of producing final texts
acceptable to all 35 participants.'
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USSR-SOMALIA: MISSILE FACILITY
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Analysis of satellite photography
ndicates that the Soviets are building a ad i y
in Berbera, Somalia, to handle cruise missiles for
the Soviet Indian Ocean naval squadron. The in-
stallation could also handle surface-to-air missiles
or torpedoes, but it is not suitable for ballistic
missiles.
Construction began in the fall of 1973, and
could be complete by midyear. The installation at
Berbera closely resembles cruise-missile support
facilities at naval bases in the USSR; the fuel
storage area can be directly associated with cruise
missiles. It is significantly different, however,
from facilities in the Soviet Union used for fixed
or mobile coastal-defense missiles, SAMs, tactical
missiles, and ballistic missiles. It is also much
larger and more complete than those built in
countries that have received Soviet missiles for
local naval and air-defense forces. Somalia does
not have naval missiles and does not have surface-
to-air missiles in the area of Berbera.
The facility, the first of its kind discovered
outside the USSR, probably will be used to store,
maintain, and repair cruise missiles for Soviet
ships and submarines in the Indian Ocean. Soviet
cruise-missile ships operating in that area?there
are none there currently?must now rely on mis-
sile-handling facilities at naval bases in the USSR.
The new installation obviously increases the re-
load capability of Soviet ships and submarines
equipped with cruise missiles.
During the past few years, several types of
surface ships and submarines equipped with cruise
missiles and SAMs have operated in the Indian
Ocean. Some of these have called at Berbera.
More, naval ships with these kinds of missiles are
entering the Pacific Fleet, which piovides most of
the ships in the Indian Ocean contingent.
In putting a missile-handling installation in
Berbera, the Soviets have obviously concluded
that the military advPntage outweighs the politi-
cal backlash they might get if it becomes public
knowledge. Conservative Arabs and other states in
the Indian Ocean area will see the facility as
evidence of new Soviet designs, while other gov-
ernments may point out the dangers involved in
big-power naval rivalry. Moscow might be accused
of an intention to control the approach to the
Suez Canal, even though the facility has no such
divect bearing.
On the Somali side, the establishment of the
missile facility probably reflects a weakening in
the position of those members of the Supreme
Revolutionary Council who have opposed close
ties with the USSR. But it gives the Soviets more
reason than ever to do what they can to see that
President Siad and the pro-Soviet members of the
council remain in power. Somalia's attempts to
obtain financial aid from the Arab world could be
endangered, however, when the existence of this
installation bacomes known. Although Siad may
hope he can have it both ways, King Faysal of
Saudi Arabia and other conservative Arab leaders,
who want to reduce Soviet influence in the Mid-
dle East and Indian Ocean, probably will review
their promises of over $50 million in aid to
Somalia.
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EC-CEMA: DIALOGUE OF THE DEAF
The first formal meeting between officials of
the EC Commission and CEMA ended last week
in disarray. The session in Moscow confirmed for
the EC the disparate nature of the two organiza-
tions, but even commission officials were sur-
prised by the stubbornness, secretiveness, and
poor preparation on the Communist side.
The Soviets had looked on the meeting,
billed as preparation for a visit to Moscow by EC
Commission President Ortoli, as Western recogni-
tion of equality between the community and
CEMA. Moscow could then hope to delay or
circumvent implementation of EC controls on
trade with the various East European states by
demanding that commerce be governed by EC-
CEMA agreements. At the same time, Moscow
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could use CEMA's enhanced international status
to promote closer economic integration within
the East European bloc. The Soviets have been
having trouble getting the Romanians as well as
other East Europeans to sanction an unlimited
negotiating mandate for CEMA's secretary gen-
eral.
At the three-day Moscow session, the two
sides talked past each other, with the CEMA
group?characterized by one EC official as "unim-
pressive aging bureaucrats"- -concentrating single-
mindedly on trying to arrange a schedule for
Ortoli's visit and the commission delegation at-
tempting to get a Lialogue going in such areas of
possible EC-CEMA cooperation as standardiza-
tion, environmental protection, and statistics. The
commission is anxious to discuss technical areas
in order to underline its view that CEMA has
authority here but, unlike the EC, has no compa-
rable jurisdiction over trade policy.
CEMA remains publicly committed to estab-
lishing links with the EC and will probably take
up the commission's invitation to send experts to
Brussels to continue the Hiscussions. Soviet media
have already begun to restructure the facts of the
EC-CEMA meeting in order to meet the USSR's
political objectives. lzpestia, for example, claimed
that the session had been "useful" and that "pro-
gress was achieved in preparations for a proposed
rn,-9ting of the leaders of the two organizations."
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The EC, despite its near contempt for
CEMA, will also seek to develop a dialogue. In the
view of a commission official, public opinicn in
the community would not aIILw the EC to ignore
CEMA overtures. More importart, perhaps, is the
EC desire to avoid any snub that could compli-
cate community efforts to reach bilateral arrange-
ments wiin CEMA members.
USSR: SOYUZ 17 COSMONAUTS RETURN
Two Soviet cosmonauts returned to
earth on February 9 after 30 day r in orbit, 28
of which were spent aboard the Salyut 4
space station. According to lass, the cosmo-
nauts are in good health. As reported earlier,
the crew completed a wide variety of scien-
tific experiments in astronomy, astro-naviga-
tion, and space biology and medicine during
their four weeks aboard Salyut 4.
The cosmonauts in flight
By agreement with NASA, the results of
medical experiments performed aboard Salyut
4 will be compared with similar tests con-
ductod on the US Skylab. The crew's stay
surpassed the previous Soviet record of nearly
24 days in space set by the Soyuz 11 crew in
Salyut 1. The US still retains the world record
of 84 days, set in early 1974 by the third
crew of astronauts to visit Skylab.
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BERLIN: ENDLESS NEGOTIATION
In a time of detente, Berlin is no longer the
bunion that the Soviets, in Khrushchev's phrase,
could step on whenever they wanted to give the
West a pain. The passing of the age of sharp
confrontation and the signing of the 1971 Quadri-
partite Agreement on Berlin do not mean, how-
ever, that the Berlin question has disappeared, but
merely that the debate is now conducted on a
different level and in more muted tones. The
Quadripartite Agreement incorporates each side's
philosophy?stating with blithe inconsistency that
West Berlin is not a constituent part of West
Germany and shall not be governed by it, but also
that ties between West Berlin and the FRG shai
be strengthened. Differences in interpretation
the agreement are therefore inevitable, and, in
fact, were anticipated.
In recent weeks, the Soviets have made a
number of complaints about Berlin matters in
conversations with West German and Allied diplo-
mats. They have protested:
? Plans to establish an EC vocational
center in West Berlin.
? Establishment last year of the FRG Fed-
eral Environmental Agency office in West
Berlin.
? West German extension of the 1972
FRG-Austrian consular treaty to "Land
Berlin."
? Nomination of West Berlin Governing
Mayor Schuetz as a plenipotentiary in cultural
matters under the 1963 French - West Ger-
man friendship agreement.
? Decisions by the Western Allies to grant
landing rights in West Berlin to airlines of
countries other than the three powers, a long-
standing controversy.
? Allied toleration of the right-wing Bund
Freies Deutschland party in West Berlin.
The Soviets have also expressed disappoint-
ment over the cool Western response to their
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propostzls for a lavish celebration in Berlin of the
30th anniversary of V-E Day. The Soviets ap-
parently intended these ceremonies to take place
entirely in West Berlin, thereby strengthening
their role there without a corresponding increase
in the residual Allied presence in East Berlin.
With these protests as a backdrop, Soviet
Deputy Foreign Minister Zemskov recently told
West German Ambassador Sahm that the FRG
was violating the Quadripartite Agreement by
"creating precedents." Sahm was taken aback by
Soviet accusations that the FRG had reneged on
agreements reached during the Schmidt visit to
Moscow last December. Indeed, the West Ger-
mans thought that Schmidt had obtained the
Soviets' agreement that individual West Berliners
would be covered by agreements the FRG made
with third countries.
In a broader sense, the sniping on Berlin
issues reflects a nagging Soviet suspicion that the
idea of a united Germany is still a long way from
extinction in the minds of West Germans. Recent
West German protests over the concept of an East
German citizenship in the consular treaty be-
tween the GDR and Austria may have aroused
underlying Soviet concerns that the German re-
unification issue can still influence West German
policy and, indeed, may never vanish. The
FRG-Soviet dispute over the "peaceful change"
formulation at CSCE has probably had a similar
effect, since the problem essentially concerns
West German efforts to leave open a legal path to
eventual reunification of the two German ies.
The foreign policy line of detente and the
Soviets' desire for good relations with West
Germany affect the means they employ, but
Moscow's basic objective of defining West Berlin
as a separate entity will remain unchanged. The
Soviets may tolerate certain actions with which
they disagree, such as establishment of the Fed-
eral Environmenta' Agency in West Berlin, but
they will never legally recognize any step that
seems to violate the dictum that West Berlin is
not a constituent part of the FRG. In a sense, the
adversary process of seeking precedents and estab-
lishing limits amounts to a continuous renegotia-
tion of the Quadripartite Agreement.
ROMANIA-YUGOSLAVIA: DRAWING CLOSER
Uncertainties about major international de-
velopments are drawing Belgrade and Bucharest
into closer cooperation. At the end of January,
Tito sent Stane Dolanc, his second-in-command in
the party, to Romania for two days of talks with
President Ceausescu on international issues and
bilateral party cooperation. The session was in
keeping with the practice of regular high-level
contact between the two countries, but the
shared concern over a series of major develop-
ments since Dolanc and Ceausescu last met?at
the Romania;, party congress in November?may
have caused Belgrade and Bucharest to compare
notes sooner than planned.
The hint of urgency in the meeting gained
substance the next week, when Romanian De-
fense Minister lonita suddenly showed up in
Yugoslavia for three days of discussion of "coop-
eration between the friendly armies." Like the
party talks, regular military contacts are a %Noll-
established practice between the two states, but
lonita's talks were more prolonged than any in
recent years. lonita spent some time near Tito's
current residence at a Montenegrin spa, where he
may have met with the Yugoslav leader.
There are several signs that both sides are
worried by uncertainties over the stability of the
Kremlin leadership and by the future of US-
Soviet detente. These subjects were probably high
on the Dolanc-Ceausescu agenda. The two men
also undoubtedly discussed the Arab-Israeli situa-
tion and Cyprus, both of which could have spill-
over effects in the Balkans. The economic prob-
lems caused by the recession in the West, and
apprehension that Moscow might try to take
advantage of these problems to extend its eco-
nomic influence, were probably also reviewed.
These problems, along with the force reduc-
tion and European security negotiations and the
European Communist party conference, require
the two sides to coordinate their ta^.tics and over-
all strategy as closely as possible. Both regimes
hope to avoid a repetition of the misunder-
standings and bitterness between them that lasted
for six months after the 1973 Arab-Israeli war
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EGYPT: PORT PROBLEMS MOUNT
_
The harbor at Alexandria
Acute congestion in the port of Alexandria
continues to cause serious economic problems for
Egypt. Deliveries of consumer goods, raw mate-
rials for industry, and capital goods for develop-
ment programs are being delayed despite govern-
ment efforts to expedite unloading ano trans-
shipment.
Facilities in Alexandria have been subject to
increasing strain since the canal area ports of
Ismailia, Port Said, and Suez were evacuated after
the 1967 war. Unloading facilities, warehouse
space, and internal delivery systems were barely
adequate to handle the 3 million tons of cargo
diverted from those ports even during the de-
pressed inter-war years.
Conditions rapidly grew worse after the
1973 war, ien extra imports, purchased with
wartime Arab aid, began to arrive. In late June
1974, with almost a million tons of goods piled
up on the piers and some 40 vessels waiting for
berthing space, the port was placed on 24-hour
operation. To assist overburdened civilian trans-
portation facilities, troops and military vehicles
were called out in November to help remove
goods from the docks. Although the arrival of 22
ships was indefinitely postponed, by mid-
December the queue of ships outside the berthing
area had almost doubled, and turnaround time
had lengthened from two weeks in 1973 to two
months. The Egyptian government paid stranded
ships nearly $40 million in demurrage penalties in
1974, and, by the end of the year, many carriers
were ref using to handle goods bound for
Alexandria.
According to the US consul in Alexandria,
normal unloading conditions exist only at special-
ized wheat piers, largely because postwar grain
stockpiling appears to be complete, freeing the
area for current deliveries. Congestion elsewhere
remained at peak levels late in January.
Port clearance problems are likely to con-
tinue to hamper Egyptian economic progress. The
reopening of the Suez Canal ports should permit
canal area rehabilitation plans to be implemented
on schedule over the next year or two. Conditions
in Alexandria may be alleviated by more intense
nighttime activity, by elimination of deliberate
"shakedown" attempts by stevedores, and by
acquisition of additional surface transportation
facilities. Until a new port area in the Dekheila
area of Alexandria is completed in late 1977,
however, investment and consumption in the in-
terior will continue to be constrained by inade-
quate port facilities. 25X1
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PAKISTAN: BHUTTO CRACKS DOWN
The government has moved to suppress
Pakistan's main opposition party, following the
assassination last weekend of Prime Minister
Bhutto's chief political lieutenant in the North-
West Frontier Province. The crackdown against
the National Awami Party is sure to intensify
friction between Bhutto and his political foes and
is likely to further strain Islamabad's poor rela-
tions with Afghanistan, which has long been a
supporter of the Awami party.
Flayat Mohammad Sherpao, the leader of
Bhutto's party :n the North-West Frontier and the
dominant figure in the provincial government,
was killed in a bomb explosion on February 8 in
Peshawar, the provincial capital. Although no one
apparently has been formally charged in Sher-
pao's murder, some Pakistani officials and the
government-controlled media are blaming it on
the National Awami Party and the Afghans. The
party has been outlawed, and its leader, Wali
Khan, has been arrested along with hundreds of
party members.
In the past, Bhutto has frequently accused
the Awami group of seeking, with Afghan sup-
pott, to promote secession in the North-West
Frontier and in Pakistan's other border province,
Baluchistan. Most of the party's strength is con-
centrated in these two provinces. Islamabad has
claimed that the Afghans have trained and
equipped Pakistani extremists affiliated with the
party and that these extremists have carried out a
number of bombings in Pakistan in recent months.
Bhutto's government has periodically
arrested Awami party workers, but until last
weekend it had refrained from banning the party
or moving directly against Wali Khan. Bhutto may
have viewed the murder of Sherpao both as an
atrocity that required a show of strength by the
government and as an opportunity for silencing
the National Awami party and Wali Khan, his
most vociferous domestic critic.
Afghanistan has provided propaganda sup-
port and some material backing to the National
Awami Party, but both the Afghans and party
leaders have denied that they support the break-
up of Pakistan or were responsible for the bomb-
ings. They claim to seek--through peaceful
means?greater autonomy for the two border
provinces, whose people are ethnically more
closely related to the Afghans than to other
Pakistanis.
Some observers in Pakistan have suggested
that young pro-Awami extremists, including
students, may have carried out the bombings in
disregard of the wishes of party leaders. There is a
strong possibility that student extremists were
involved in the Sherpao incident, inasmuch as he
was killed inside Peshawar University.
So far, the official Afghan response ?to the
arrests of Awami partisans has been relatively
restrained. Further Afghan reaction will depend
to a large degree on how far Bhutto goes in
holding Afghanistan responsible for Sherpao's
death. In the North-West Frontier there is little
immediate danger that the provincial coalition
government led by Bhutto's party will collapse.
Awami supporters may resort to further bomb-
ings, however, and Bhutto will be hard pressed to
find another strong and reliable lieutenant to
replace Sherpao. 25X1
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OPEC: TRIPARTITE INVESTMENT
Some members of the Organization of
Petroleum Exporting Countries, in -A effort
to diversify investment and blunt criticism by
the developing countries, are turning to tri-
partite investment. Such ventures would bring
together surplus oil funds and Western tech-
nology in third countries, thus enabling the
oil producers to increase safe investments in
the developing countries without using their
own scarce manpower. This sort of invest-
ment, however, is likely to be concentrated in
a handful or' developing countries, mainly
Arab ones.
Among the Middle East producers,
Kuwait is the most likely to pursue tripartite
ventures. At least half a dozen Kuwaiti finan-
cial institutions are already active in develop-
ing countries. The Kuwaitis have recently
agreed to build a power plant in Jordan and
to organize agricultural development in
Yemen, using mainly US consultants and con-
tractors. Kuwait is also involved in joint
projects with the World Bank and its sub-
sidiary, the International Development
Association.
The Saudis plan to channel an increasing
share of their investment into developing
countries. They have already undertaken to
build a sugar-processing complex in Sudan as
a joint venture with Japanese and US firms.
The Saudis also are considering projects in
Egypt in cooperation with US, British, and
Italian firms.
Tripartite investment will do little to off-
set the current-account deficits of most de-
veloping countries this year. The amount in-
volved will remain small, and will often just
replace funds earmarked For direct grants or
loans.]
25X1
MALAGASY REPUBLIC: MORE PROBLEMS
Continuing ethnic tensions were apparently
the main factor behind the assassination this week
of Colonel Richard Ratsimandrava just six days
after he had assumed power as head of state and
government. A 19-member national military com-
mittee, on which all regional and tribal groups are
represented, has taken over, but a struggle for
power among Madagascar's badly divided military
and civilian leaders appears likely.
Ratsimandrava was fatally wounded on Feb-
ruary 11 in an ambush of his car in Tananarive,
the capital. The new military committee blamed
the slaying on members of a mobile police force
camp that has been the center of anti-government
activity in recent weeks. Army units forced the
camp to surrender on February 13.
The paramilitary police force is made up
mostly of coastal tribesmen who are traditional
rivals of the inland Merina tribe of Ratsimandrava
and his immediate predecessor, General Rama-
nantsoa, who stepped down on February 5. A
group of dissident army officers, also from coastal
tribes, took refuge in the police camp in early
January after failing in an effort to overthrow the
government.
Tne military committee is headed by Gen-
eral Gilles Andriamahazo, a respected senior offi-
cer of the armed forces. He was a.minister of state
in Ratsimandrava's short-lived cabinet, but is not
regarded as a strong political leader. Former for-
eign minister Ratsiraka?the driving force behind
the militantly nonaligned policy the country has
pursued since 1972?is also on the committee.
The new government's most urgent task is to
defuse the growing ethnic unrest on the Indian
Ocean island. The coastal people, who make up
the bulk of the population and who were politi-
cally do,,-,inant from independence in 1960 until
1972, have been demanding a bigger voice in
public affairs. A widening ethnic split could pose
a serious threat to public order and stability and
could possibly pit the gendarmerie?a significant
military force that is, like the mobile police, pre-
dominantly coastal in composition?against the
army, which is largely a Merina D reserve
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CAMBODIA: THE STRANGLEHOLD TIGHTENS
At mid-week, Khmer Communist forces
captured the last government position near a vital
Mekong River narrows some 25 miles southeast of
Phnom Penh. Although government troops still
hold positions around the Cambodian navy base
at Neak Luong and several beachheads along the
lower reaches of the river, the insurgents now
control all key riverside terrain below Phnom
Penh. Government forces will now have to re-
establish at least partial control of the narrows
upstream from Neak Luong before attempting to
regain territory elsewhere along the river.
Meanwhile, ammunition stocks in Phnom
Penh have sunk to the critical level, and civilian
airlines are preparing to double their deliveries of
military equipment. With the prospects for bring-
ing a resupply convoy up the Mekong in the near
future growing dimmer, the government has
implemented electrical blackouts to conserve fuel.
Rice stocks at the beginning of the week stood at
a 36-day level, and the government has not yet
had to increase rationing.
Ground combat around the capital remains
much less intense than during the initial weeks of
/ 1 )
/ Prok\ /
Pnou*, Goverllment clearing
,?1 operation stalled
--II._ ? ' , .
HNOM PENHe. ,.
Poei)0n -ton?g'-', '
Airpple Gocromment
poston lost
Cf/ 0
I )1).fir,
Takeo
\Noak
, Lao,99
eHeavy , concentrations
of Communist
forces
IETNAM
25X1
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the Communist offensive. The insurgents, how-
ever, are keeping the Cambodian army's 7th Divi-
sion northwest of the city under steady pressure
and are continuing to launch sporadic rocket at-
tacks at Phnom Penh proper and at outlying facil-
ities?including Pochentong airport. Government
commanders in some sectors have felt the am-
munition pinch and, on occasion av
artillery fire.
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SOUTH KOREA: THE REFERENDUM
With 73 percent of the ballots in his favor,
President Pak won the national vote of confi-
dence for which the referendum on February 12
was organized. The South Korean political stage is
now set for a series of initiatives designed to
strengthen the government's hand in coping with
its domestic opponents.
25X1
It is still unclear exactly how Pak intends to
proceed. /if
his opponents do not become too noisy, Pak may
follow up the referendum with a major restruc-
turing of the government party and dramatic
changes in the cabinet. Pak's victory stater,i2nt
spoke of a "nonpartisan national political sys-
tem." This appears to be a reference to a rumored
conversion of the party/cabinet system of the
past 12 years irto a kind of national front?a
non-partisam coalition f?i political and functional
groups deemed reliable by the government.
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Thieu visiting the front
VIETNAM: A QUIET TET
The Year of the Cat came in quietly with no
surge of Communist military action. All of the
government's military units were on full alert, and
security operations by the police and militia
forces held anticipated terrorism and sabotage to
a minimum. Despite the relative calm, there has
been no lessening in the number of signs of Com-
munist preparations for increased combat in the
coming weeks.
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President Rodriguez meets representatives of the armed forces and national police.
ECUADOR: PERILS OF PROSPERITY
On February 15, the Rodriguez adm'nistra-
tion will mark the third anniversary of the coup
that brought it to power. The military govern-
ment's increasingly evident competence, after a
halting start, readily distinguishes the present
regime from its predecessors. In no small way,
this has been made possible by the profitable
exploitation of petroleum, which began in late
1972.
Petroleum has alsc created problems for the
government. Revenues from oil, some cc which
have been channeled into modernizing public
works facilities, transp )rtation, schools, and mili-
tary hardware, have lei: to excessive expectations
and indirectly to inflation. A chronic teacher
shortage leaves new schools unopened; antiquated
cars and trucks limp along modern highways;
peasant families without plumbing have little use
for new water and sewage treatment plants. Many
Ecuadoreans believe that oil is destined to enrich
their country as it did Venezuela, despite their
government's 210,000-barrel ceiling on daily oil
production. Widespread construction has almost
eliminated unemployment, enlarging the worker's
stake in the future and creating a new mass politi-
cal awareness?at a time when the armed forces
have announced their intention to retain power
indefinitely.
The most significant frustrations are within
the military institution itself. The long-standing
rivalry between army and navy officers has
become a government weakness, reinforced by
traditional social and ethnic hostility between the
Andean highlands, which are the army's preserve,
and the coastal lowlands, where the navy domi-
nates.
Rodriguez, an army general, has maintained
the army's control of the government. He had
sought to placate the navy with the governorship
of coastal Guayas Province and control of the
economically important natural resources min-
istry, which manages both petroleum and tuna
fishing. Within the past four months, however,
the powerful and ambitious Admiral Gustavo
Jarrin has been replaced as head of the ministry,
and an army officer has been appointed to the
governorship. In addition, the navy has begun to
realize that much of the country's new wealth is
going into large orders for aircraft, tanks, and
artillery, with only token upgrading of the fleet.
A further irritant to navy and air force officers
and even some army generals is Rodriguez' failure
to honor his early pledge to rotate the presidency
among the services. 25X1
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/the military government will
enter its fourth year with an embarrassment of
riches. The treasury has benefited not only from
petroleum, but also from this season's excellent
tuna run, which produces revenue directly
through the Ecuadorean fishing industry and
indirectly through fines of unlicensed foreign
tuna boats. The tension that this wealth produces
within the military is likely to lead to less mono-
lithic government during 1975 and to a cor-
responding loweripg of administrative efficiency.
This in turn could fuel existing frustrations, sully
the military's generally good public image, and
provoke a major change in the government's out-
look. At that juncture, inter-service rivalrics
would take a back seat to officers' personal
ideologies, with some seeking to emulate the au-
thoritarian Brazilian example and others looking
to the "revolutionary': Peruvian model./
25X1
BRAZIL: PACE OF LIBERALIZATION
Recent developments appear to have
strengthened the process of gradual relaxation of
social and political controls.
Local observers have noted, for example,
Justice Minister Falcao's response last week to
public and congressional inquiries into the fate of
political prisoners. Although his remarks were
noncommittal, if not a whitewash, they were still
an unprecedented step because the government
heretofore has not reacted at all to this sensitive
issue. Falcao's latest announcement reinforces the
view that the Geisel regime is seeking to centralize
security responsibilities and to lessen the armed
services' role in such activities. A similar motive
probably was behind Falcao's inordinately promi-
nent role in an earlier announcement of moves
against the Communist Party.
The US embassy also interprets a recent
optimistic speech by the new president of the
Senate as another sign of progress in the liberal-
ization process. The senator stressed that Presi-
dent Geisel is committed to a gradual easing of
political controls in company with the pursuit of
the revolution's other goals. In this process, the
senator noted, the cooperation of politicians is
"indispensable." While this statement?even
though it emanates from the leader of the govern-
ment party?is in no way binding on the admini-
stration, it probably was not issued without the
approval of the President or his closest advisers
and does seem to reflect Geisel's general
intentions.
Other government moves also seem to signal
at least a desire to ease controls in several areas.
Over the last six months, for example, the Labor
Ministry has removed government interventors
from a third of the nation's labor unions. More-
over, formal censorship appears to have ended at
virtually all newspapers, although tacit restric-
tions remain.
Early tests of the commitment to liberal-
ization will come in at least two areas. One stems
from the recent election of an anti-government
slate in an important labor union in Rio de
Janeiro. There is some doubt that the government
will allow the seating of the insurgents, given the
politically turbulent history of the union.
A more far-reaching test will come next
month when congress convenes with vastly in-
creased opposition representation. Defiant atti-
tudes on the part of dissident legislators could
provoke a right-wing reaction that would hinder
further liberalization. Nevertheless, the process of
selectively easing controls, widely known as
"decompression," is an established part of the
Geisel program. 25X1
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PANAMA: OPTIMISM ON CANAL TREATY
Panamanian negotiators are optimistic that a
draft of a new canal treaty will be completed this
summer. General Torrijos and other government
leaders are focusing public attention in Panama
on the positive aspects of a new treaty.
In a press interview last week, Foreign Min-
ister Juan Tack stressed that a spirit of com-
promise by both sides, but particularly Panama,
has permitted progress to be made since he and
Secretary Kissinger agreed on a treaty framework
a year ago. Tack said that Panama has been forced
to compromise because it is faced with the 1903
treaty that gives the US the right to operate,
maintain, and protect the canal in perpetuity.
Any change in the status quo, he argued, will
advance the government's fundamental objective
of taking control of the canal.
The foreign minister declared that probably
the most important concession the Panamanians
will be asked to make is to allow some US mili-
tary facilities to remain in their country. In his
view, there is absolutely no way the US can be
forced to dismantle them the day after a treaty is
signed. Tack said that Panama is prepared to agree
to a transition period for the US to withdraw
from the present canal zone and to give the US
the use of certain facilities and rights to operate
and protect the canal during the life of a new
treaty. Panama would share in these responsi-
bilities until the pact's expiration and would
thereafter exercise them exclusively.
In response to questions about timing, Tack
said the two sides were working to have a draft
treaty ready this year, but that the concentration
is on substance rather than on a deadline.
The minister's statement is a measure of the
growth of the Torrijos government's commitment
to a new treaty. Torrijos and Tack are strong
nationalists, and recognition of the need to com-
promise has not come easily to them. They now
seem convinced that the treaty evolving from the
current negotiations is probably the best they can
get, and they are trying to sell it to their people as
a bridge between -If e present US control of the
canal and event ral total 1-6namanian con-
trol.
25X1
ARGENTINA: GUERRILLA SWEEP
After more than a year of resisting presi-
dential efforts to give the army a major role in the
counter-terrorist campaign, army commander
General Anaya is at last preparing to direct a
sweep on one of the guerrilla strongholds. The
turnabout can probably be attributed to the mili-
tary's dissatisfaction with police ineffectiveness
and the conviction among army leaders that
public opinion now is prepared psychologically to
accept the fact that the police alone cannot stamp
out terrorism.
The first target of the army drive is in the
northwest province of Tucuman, where the
People's Revolutionary Army has its stronghold.
The guerrillas have long had the sympathy of
local workers in the depressed sugar industry, and
some of the principal training camps for the in-
surgents are ill the nearby mountains. Govern-
ment forces have attempted to destroy this guer-
rilla bastion before, but poor police and military
coordination, a failure to act promptly on intel-
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The People's Revolutionary Army, which
has suffered setbacks in Cordoba and elsewhere as
a result of the government crackdown, will prob-
ably have its activities in Tucuman disrupted by
the nevr campaign. Nevertheless, it can be
expected to react by stepping up terrorism in
Buenos Aires, where the police have been less
effective in dealing with the underground or-
ganizations.
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VENEZUELA: OIL DIPLOMACY
President Carlos Andres Perez' oil diplomacy
has scored several successes ill past weeks. Al-
though Venezuela is increasing its political and
economic influence in the hemisphere through
petroleum and assistance agreements, this is
raising doubts among some Latin countries over
Perez' ultimate intentions.
Last week, a Peruvian delegation led by the
minister of energy and mines, Fernando Mal-
donado, returned to Lima with an agreement
from the Venezuelan state petroleum corporation
to supply Peru with 14.6 million barrels of oil for
the next two years. The Peruvians will pay half in
cash, with the rest to be paid from Pea's growing
oil production after the two years expire. The
agreement comes on the deels of Peru's support
for Venezuela in its dispute with the US over the
Trade Reform Act, and further solidifies coopera-
tion on hemispheric issues between the two
countries.
The most significant agreement, however,
was reached with Surinam. If ratified by both
countries and fully implemented, the accord will
tie Surinam's future economic growth with that
of Venezuela, and will establish a basis for a
special political relationship as well. The agree-
ment provides for joint development of Surinam's
bauxite deposits, with much of the bauxite and
alumina produced to be c.hipped to Venezuela. In
return, Venezuela is to become Surinam's major,
and perhaps exclusive, supplier of petroleum and
petroleum products. Caracas has also offered to
do a feasibility study on the construction of an
oil refinery, which it would build, finance, and
provide with technical assistance.
Even more pacts may be in the offing when
Perez meets soon with Caribbean leaders and
holds a second round of talks with the Central
American presidents next month. The Caribbean
is vital to Venezuela in terms of security and
economic potenti-I, and Perez has pledged eco-
nomic assistance. He may be prepared to offer the
Caribbean importers of Venezuelan oil a govern-
ment-to-government arrangement similar to the
agreements reached wih the Central American
presidents in early December. At that time, the
Central American countries agreed to pay Vene-
zuela about halt the market price for petroleum,
with the difference to be held in local currency in
time deposits. This fund wcvild draw interest for
Caracas and at the same time could be used by
the Central Americans for development projects.
These arrangements, while advantageous to
the Central Americans, are meant primarily to
serve Perez' main economic and political ob-
jectives:
4 To become an investing nation on which
other nations depend for capital and badly
needed petroleum.
? To place overseas the surplus oil riches
that would be inflationary and difficui, to
invest within the country, and to earn interest
income from abroad.
? To develop a leadership role for Vene-
zuela among the less developed countries that
produce raw materials, and to create client
states that will follow Venezuela's lead on
hemispheric issues.
Although some Latin governments have pri-
vately accused the Venezuelans of "wielding a big
stick" in inter-American affairs and of being a
"nouveau riche" country, their need for Vene-
zuelan petroleum and assistance precludes open
expressions of irritation or opposition to Perez'
claims of leadership. Moreove-, Perez has been
adroit in casting the present dispute with the US
in terms of broad Latin interests and unity rather
than as a narrow dispute between Venezuela and
Washington.
In the coming months, Perez evidently in-
tends to accelerate the pace of his oil diplomacy
through additional agreements and personal tips
to several Latin countries. He is already planning
for a summit meeting of all Latin American
states, which will deal with Latin problems and
give Venezuela an opportunity to exploit its self-
assigned role as a leader in hemispheric affairs.
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